jueves, 19 de marzo de 2020

Trade monopolies and silent trade

The Capture of the Spanish Galleon Nuestra Señora de Covadonga, 20 April 1743
John Cleveley, the younger. Shugborough, National Trust.
Oil on canvas, 1756. 1029 x 1518 mm (40 1/2 x 59 3/4 in).

The Spanish Empire developed a system of controlled fleets in certain ports. However, merchandise transportation requirements exceeded official shipments and their concentration in Veracruz port. Here, the authorities practiced disguised or clandestine trade, which is reflected in an apparent drop in trade  between 1600 and 1720, exploited by the Netherlands and England. In turn, Spain could not adequately supply the New Spanish market and did not import enough goods, except metals.1

Smuggling promoted by England, Holland, France, and Portugal represented the arrival of a large quantity of high-value merchandise to New Spain through the Caribbean. It was carried out through official commercial companies, forced arrivals and even threats. On the other hand, in the Pacific Ocean, trade between Acapulco and Manila or from Acapulco to Callao was carried out outside official regulations, either due to excessive tonnage or exports disguised as cabotage. Foreign agents operating in Manila and the "useless" Caribbean ports made enormous profits from the spill of Mexican metals. This dynamical trade contrasts with the rigidity of the Spanish system. The mercantile prohibition system did not stop the opening of shipyards from Callao to Acapulco, an activity only accessible to the great potentates, groups with a commercial vision and power.2
Silent trade to New Spain was supported by the numerous establishments in the Antilles: Jamaica and Barbados (English), Curaçao, Tobago and Saint Eustace (Dutch), and Saint Thomas (Danish). From where it was trafficked with Campeche wood, European manufactures and especially with slaves. 
Mexico City merchants had numerous contacts at Seville’s Trading House Casa de la Contratación. This institution had been created to defend the commerce of the metropolis, through fleets and monopolies. It also promoted nautical and geographic knowledge; instructed the teaching of navigation techniques, construction and repairing of ships, and the commercial information.3 However, the Crown soon became a predator of economic activity: it increased taxes; did not respect the rules of the game applying forced seizures and acted arbitrarily applying transportation percentages (avería); it favored certain groups by allowing informal negotiations and yielding economic power in exchange for merchant consulates influencing the decisions of the Trading House; it allowed the transfer of power to the officials in Seville, who obtained economic and social benefits through clandestine businesses and prevented free access to public offices by the sale of trades, thus promoting the rapine of the officers.4 In consequence, the fleets became less frequent during the XVII century in order to push prices up.


From Ruggiero Romano, Coyunturas opuestas, pp. 124-143.

In the 1620s, the Thirty Years' War forced King Philip IV to order the importation of quicksilver from the Idria mines in Slovenia. To achieve this, he had to resort to credit and the intermediation of Sevillian and merchants from New Spain, who count on a network of representatives in Antwerp, Venice and Idria’s mercury dealers.5 Before 1642, Spanish commercial networks used to reach Lisbon, since the union of the crowns of Castile and Portugal in 1580 had allowed the participation of an extensive network of commercial relations led by members of the Sephardic Portuguese community, who owned numerous contacts in Seville and the main European economic centers, and sufficient capital to support the Spanish Crown through numerous concessions. These activities enabled the Portuguese to link up with the English, Dutch and French ports, as well as funding from the Spanish Navy (Armada de Barlovento). In 1642, Portuguese kingdom independence, radicalized anti-Semitic positions, among which the rumor of a "great complicity". Between 1641 and 1649 the wealthiest merchants from Veracruz and Mexico City were arrested and questioned by the Inquisition.6 In the following years, other processes indicted some Mexico City merchants and staged dramatic autos de fe (religious public executions).7
Instead, another group of merchants in the city benefited from businesses that included financing the production of silver, manipulating the activities of the Mint, and credit for the acquisition of quicksilver in times of crisis. Among the most prominent were the Biscayan José de Retes Lagarcha and Luis Sánchez de Tagle, both merchants called their nephews in Spain to marry with their daughters and establish family and client relationships with the highest viceregal authorities. Their commercial networks extended to the main mining ores in Pachuca or Parral, where they operated through agents (factores), by means of which they concentrated mining equipment and the purchase of silver to coin. Their privileges at the Mint consisted of controlling the positions of treasurer, chief guard of the Mint, major carver or general metal setter. This group of merchants has been called mercaderes de la plata.8 The sale of public positions and the practices derived from their businesses, could be seen as harmful to the king and the royal institutions, however, the large sums awarded to the Crown caused that his crimes were minimized and even they obtained noble titles (Luis Sánchez de Tagle that of Marquis of Altamira and Juan Urrutia Retes that of Marquis of Villar del Águila). 
Silver traders were not the only beneficiaries of restrictive policies. The ban established in the 1640s to carry out intercolonial trade was evaded by the merchants of Mexico City through a triangular route between Acapulco, Manila and Callao for the importation of cocoa beans to New Spain, the main world consumer. The small group of merchants in Mexico City, specialized in cocoa trading, transported large quantities of the beans to optimize their costs. During the restrictive period, most imports were made through Veracruz and surreptitiously through the ports of Acapulco, Huatulco and Zihuatanejo, where shipments from Guayaquil were received. This cocoa was cheaper, which allowed its massive distribution in the thrifty market.9 

Notes
1. Ruggiero Romano, Mecanismo y elementos del sistema económico colonial americano. Siglos XVI-XVIII, México, Fondo de Cultura Económica, Fideicomiso Historia de las Américas, 2004, pp. 273-290 y 299 a 305.
2. Ibid, pp. 273-290.
3. Carlos Álvarez Nogal, “Instituciones y desarrollo económico: la casa de la Contratación y la Carrera de Indias (1503-1790)”, en La Casa de la Contratación y la navegación entre España y las Indias, Sevilla, 2003, pp. 21-34.
4. Ibid., pp. 34-50.
5. Renate Pieper y Philipp Lesiak, “Redes mercantiles entre el Atlántico y el Mediterráneo en los inicios de la guerra de los Treinta Años”, en Antonio Ibarra y Guillermina del Valle, Redes sociales e instituciones consulares en el Imperio Español. Siglos XVII a XIX, México, Facultad de Economía, UNAM, Instituto de Investigaciones Dr. José Ma. Luis Mora, pp. 19-39.
6. Carlos García de León Antonio, “La malla inconclusa. Veracruz  y los circuitos comerciales lusitanos en la primera mitad del siglo XVI”, en Antonio Ibarra y Guillermina del Valle, Redes sociales e instituciones consulares en el Imperio Español. Siglos XVII a XIX, México, Facultad de Economía, UNAM, Instituto de Investigaciones Dr. José Ma. Luis Mora, Fundación Carolina, 2007, pp. 41-83.
7. Gregorio Martín de Guijo  wrote in his diary about some of these trials, remarkably the one of Duarte de León y Tomás Tremiño del Campo en 1649.
8. Guillermina del Valle Pavón, Redes de negocios de los mercaderes de plata de México a finales del siglo XVII y principios del XVIII, Instituto de Investigaciones Dr. José María Luis Mora, documento de trabajo, s/f.
9. Guillermina del Valle Pavón, Tráfico de cacao de Guayaquil y apertura comercial. La promoción del comercio de cacao y azúcar a través del Consulado de México, documento de trabajo, s/f.

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